Our 2011 earnings margins of $26.36 per barrel outpaced the nearest competitor in our peer group by more than $7 per barrel and the average of our competitors by $9 per barrel. In addition, our 2011 upstream return on capital employed was No. 1 in our competitor group.

Now, let's look at our growth plans.

Slide: Upstream: Momentum Toward 3.3 MMBOED (Content not available)

We're on track to deliver on our long-term commitment to grow our production to 3.3 million barrels per day by 2017. Through 2014, we forecast production to grow by approximately 1 percent per year. As our Australian liquefied natural gas (LNG) investments and other major capital projects come online, this growth rate is expected to increase to between 4 and 5 percent per year.

In addition to major capital projects, our base business also is critical to achieving our long-term objectives. Our base business has delivered strong performance, and we continue to maintain our outlook for a 4 percent base decline rate. Together — by managing our base business well and staying focused on executing our queue of major capital projects, we are well placed to deliver growth and performance over the long term.

Now, let's take a closer look at our portfolio of major capital projects.

Over the next three years, 28 projects with a Chevron share of more than $250 million are scheduled to start production. Eleven of these have a net Chevron share of more than $1 billion.

Two major capital projects have already come online this year, Tahiti 2 in the deepwater Gulf of Mexico and Usan in Nigeria. Angola LNG startup is imminent, and Agbami 2 in Nigeria is scheduled for startup later this year.

Let's now review some of the projects under way in three of our key asset classes: deep water, unconventional and LNG.

Our exploration success has translated into a world-class deepwater portfolio.

In the Gulf of Mexico, we have three projects scheduled for 2014 startup. For Jack/St. Malo, a Lower Tertiary development, fabrication of the hull and topsides is under way, and late last year we began drilling the initial development wells at both Jack and St. Malo. Big Foot also is making significant progress. The hull and topsides fabrication has begun, and we are currently drilling the initial set of production wells. And in 2011, we reached a final investment decision on Tubular Bells. Like Big Foot, Tubular Bells will develop Miocene reservoirs.

Another significant growth resource for Chevron is natural gas from shale.

In the United States, we hold more than 3 million acres. Since closing the Atlas Energy acquisition, we've added more acreage and have built a strong position in the Marcellus and Utica shale formations. Our early Marcellus wells indicate a high-quality resource.

Across the Atlantic we've built an impressive portfolio of nearly 6 million acres in Poland, Romania, Bulgaria and the Ukraine. We also have positions in Canada, Argentina and China. We share the public's expectation that all of these resources should be developed safely and reliably. Let me cover some of the steps Chevron is taking to develop natural gas from shale.

Designing and maintaining proper wells is at the core of our safe production practices. Chevron has robust well designs with multiple layers of steel and cement specifically designed to protect groundwater during hydraulic fracturing and over the life of the well. You can see an example of one of these wellbores just outside our auditorium, where we have an expert who can talk to you in more detail about our well design.

Chevron also supports the disclosure of chemicals used in hydraulic fracturing. Those interested in learning more can visit FracFocus.org. We're also working to reduce freshwater consumption. For example, in Pennsylvania, we're working to capture and reuse 100 percent of produced water, reducing our consumption and need for water trucking, transfer and disposal.

Additional information is provided in our Corporate Responsibility Report. Copies of this report are available just outside this auditorium.

Currently, LNG makes up about 7 percent of our production. By 2017, LNG is projected to reach 460,000 barrels per day of oil-equivalent, and LNG will account for 14 percent of our production. The startup of Angola LNG is a big step toward Chevron becoming a major producer of LNG. At peak rate, this facility is expected to produce about 175,000 barrels per day of oil-equivalent. LNG from the project will be marketed globally.

Construction at Gorgon is well under way, and we have a very active 2012. The first modules for Train 1 are expected to arrive on Barrow Island later this year. In addition, we plan to start construction on the domestic gas pipeline and begin completion operations on the Gorgon development wells. At Wheatstone, our second legacy LNG project in Australia, activity has ramped up since we reached a final investment decision on this project last September. We've awarded more than $13 billion of contracts, and construction of roads and key infrastructure is already under way.

Improving Downstream & Chemicals' profitability is one of the four priorities John mentioned. In 2010 we committed to improving refining and marketing returns by 7 percent by 2012 through improvements in refining, marketing, portfolio and costs. We've exceeded that commitment. At the end of 2011, these actions drove returns up by 8 percent. If you take into account industry margin improvements, our overall returns are up even more.

Downstream & Chemicals also delivered strong competitive performance. In 2011, our adjusted earnings per barrel were the best among our peers for the second consecutive year, and our adjusted return on capital employed was No. 2.

Slide: Downstream and Chemicals: Investing in Asia, Chemicals and Lubricants (Content not available)

In addition to improving Downstream & Chemicals' profitability, we also have focused on select areas for growth. Chevron has long been a pioneer in the premium base oil market. We're currently building a new base oil plant in Pascagoula, and when it starts up next year, we'll be No. 1 in the world.

In Saudi Arabia, the Chevron Phillips Chemical Company (CP Chem) is nearing completion on a world-class ethylene cracker. Once we start up later this year, CP Chem will be the largest producer of high-density polyethylene in the world.

In Singapore, our Chevron Oronite plant is already the largest additives facility in Asia. Earlier this year we reached a final investment decision on a multi-year expansion that will double the plant's original capacity.

And in South Korea, our strong position in Asia is anchored by the GS Caltex Yeosu refining and petrochemicals complex. This is the world's fourth-largest refinery and third-largest aromatics plant. A new vacuum gas oil conversion unit is slated to start up at Yeosu next year, and once online this facility will help us take full advantage of Asian growth.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This presentation of Chevron Corporation contains forward-looking statements relating to Chevron's operations that are based on management's current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimates," "budgets" and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices; changing refining, marketing and chemical margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the company's joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company's net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude oil production quotas that might be imposed by the Organization of Petroleum Exporting Countries; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from other pending or future litigation; the company's future acquisition or disposition of assets and gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principles promulgated by rulesetting bodies; and the factors set forth under the heading "Risk Factors" on pages 29 through 31 of the company's 2011 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.

Certain terms, such as "unrisked resources," "unrisked resource base," "recoverable resources" and "oil in place," among others, may be used in this presentation to describe certain aspects of the company's portfolio and oil and gas properties beyond the proved reserves. For definitions of, and further information regarding, these and other terms, see the Glossary of Energy and Financial Terms.